In 2018, in an environment of economic growth and loose monetary conditions, with the Central Bank keeping the monetary policy rate at a multi-year low of 4.25%, the Colombian banking sector posted a loan portfolio expansion of 6.1% y/y and total asset increase of 2% y/y (both measured in COP). Total net profit for the sector increased considerably by 25.6% y/y, boosted by low rates on funding sources (mostly deposits) and a reduction in administrative expenses. This improvement in sector performance was reflected in an increase in total shareholder equity of 8.9% y/y, ending 2018 at COP 82.9tn. The solvency of credit institutions, defined as capital buffers and liquid assets held as a share of total assets, remains at comfortable levels, with the sector average solvency index hovering around 16% as of December 2018, well above the regulatory minimum of 9%. The liquidity risk index, which measures the share of liquid assets that banks hold and can be used to manage short-term liabilities, stood at a high 300% level at end-2018.

01 EXECUTIVE SUMMARY

02 SECTOR IN FOCUS

03 COMPETITIVE LANDSCAPE

04 COMPANIES IN FOCUS

05 REGULATORY ENVIRONMENT

06 CONSUMER FINANCE

07 RETAIL CHANNELS